How an agricultural cooperative grew into a grain holding

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Uniting its interests and capacities, agricultural producers of the Akmola region managed not only to minimize their costs, but also to increase revenues

Solid contracts, foreign exchange earnings, financing by banks, the growth of the volume of deliveries, a solid business reputation. The agricultural production cooperative "Regional grain holding" made the dream come true, and enjoys benefits of the commercial reality. CEO of agricultural production cooperative Erbol Tashenov shared the success formula today at a press briefing at the Service of Central Communications. A pilot project on creation of the APC was presented in February 2015, in the Akmola region. On the proposal of national holding "KazAgro" the leadership of the region have proposed to unite producers of grain on the principles of cooperation and shared responsibility.

"The benefits - more available loans, reduction of price risks for farmers and second-tier banks, the availability of guaranteed sales, due to bulk purchases cheaper commodities and materials, grain export in large volumes and direct access to the processors, the distribution of additional revenue from the sale of grain in proportion to the volume of the delivered grain", - said Tashenov.

According to him, participation in the merger does not restrict the rights of its members to manage independently and to attract loans from other financing sources. The created initiative group has developed internal rules for members of the cooperative - the availability of the existing technical park, arable land, infrastructure, work experience of at least five years, the recommendations of the three for one, a positive credit history. "That is the reputation of the company played an important role", - said E. Tashenov.

APC members have received funding under the program 12 000 KZT per hectare for cultivation of wheat by 7.4% per annum.

"1 .5 billion tenge was attracted to the region's economy in 2015, which 40 APC members benefited on 125 hectares. And in 2016, we have already got 3 billion on an area of 250 hectares, in general, we combined about 400 thousand hectares of arable land, 250 hectares - is purely wheat, grain", - said the general director of the holding company.

One of the important advantages in the creation of APC is credibility of banks, enabling agricultural producers "can focus directly on the work, on the technology, rather than search of sources of funding".

"You have to understand that the program is not only as a source of funding. Its main goal is to eliminate the chaos on the grain market. Dumping on the grain market occurs due to one-time sale of grain in October and November, as all producers to meet their obligations to repay the creditor obligations, have to sell at one and the same time, this affects the prices", - said Tashenov.

This is due to the limited demand for grain and high competition between sellers.

"Our task – is to eliminate competition between them, to combine volumes of grain, then we will be able to sell steadily through contracts and even monthly distribution", - shared E. Tashenov.

In the future, APC seek to ensure that they have obligations only to "KazAgro". Then "all grown volume sold through cooperatives, participants will receive an additional profit, in proportion to the volume of the delivered grain".

"Holding signed an export contract for the supply of grain to Russia, for the first co-operative volumes of grain were shipped for export and foreign exchange earnings were received. We can say with confidence that the regional grain holding is a successful cooperative and performs all its tasks", - said Erbol Tashenov.

Among other goals of APC, he named ownership of harvesters, grain elevators. The head of the APC noted that the cooperative "has to build a complete chain of processing of grown products, then its members will not depend on price fluctuations, they will obtain added value from the sale of finished products". Erbol Tashenov is confident that "strong cooperatives will determine the future of agriculture, there is a lot of work for business".

Zhanar Serdalina